Deal Effectively with Change at Your Nonprofit

WASHINGTON (AFP eWire - Jan. 6, 2004) - Nonprofit leaders can learn how best to deal with changes in their organizations thanks to a new report from the charity regulator in the United Kingdom.

The Charity Commission developed the report 'Milestones: Managing Key Events in the Life of a Charity,' regulatory report number RS6, to examine significant changes that nonprofits face and present some of the best practices for preparing and handling those changes.

The report is divided into four sections: Starting Up, Planning Ahead, Funding and Managing Change. The report also includes the results of a mail survey of 4,000 registered U.K. charities in 1995 and a list of questions charity trustees can ask themselves as their charity develops.

Although the report comes from the United Kingdom, it discusses universal issues that charities in North America often deal with also. According to the report, milestones that charities commonly face include:

establishing themselves as a legal entity

employing staff for the first time

planning future activities

encountering changes in funding

making changes in governance or organizational structure

acquiring, repairing or selling property and

winding up or changing direction.

'Our casework shows that charities often experience milestone or transitional events as crisis points rather than as anticipated stages in a process,' the report stated. 'The evidence also suggests that charities' response is often to implement a short-term solution rather than to adapt their organizational structure to ensure that the charity has the capacity to continue to function efficiently and effectively in its new situation.'

Planning ahead is key

The survey included in the report discovered that only 49 percent of charities had developed a plan for one year or longer. And 59 percent did not have a yearly plan to ensure they could meet their commitments to their employees. In addition, 69 percent said they had never made changes to their management or governance structure.

Charities that had a long-term plan in place were consistently more likely to be accurate in their expectations of income, expenses, time commitment and legislative requirements than charities that had no plan. Survey results showed that 21 percent of charities had underestimated expenses or overestimated income in their early years, while 39 percent had underestimated the time it would take to run a charity.

The report stresses that planning is crucial to the running of a charity.

'Sound planning and a proper assessment of risks by charities, of their governance, finance and activities, will promote efficiency, sustainability and growth in the sector,' the report stated.